ACTG 3110 Chapter Notes - Chapter 5: Cash Flow Statement, Cash Flow, Income Tax

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limegoldfish227

12 Nov 2016

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Cash flow prediction is primary objective of f/s. Objective cash flow statement to disclose historical cash flows for reporting period. Three sections: operating activities, financing activities. Bottom statement or in note reconcile change cash and cash equivalents. Less temporary bank overdraft include if fluctuate positive to negative on regular basis. Operating: changes in current assets / liabilities (unless in cash and cash equivalents, net earnings not comprehensive income. Financing: changes in non-current liabilities and owners equity. Indirect start with net income and adjust impact of accrual actg to cash basis: non-cash items e. g. amortization, gain or loss on sale asset, adjust changes in current assets and liabilities. Offsetting is the process of netting assets and liabilities that correlate with each other: accounts receivable and accounts payable between 2 parties. Gaap states offsetting should not occur in cfs. E. g. bond retirement by issuing new shares. Exclude these since no actual cash flows. Partial cash transactions: only cash part recorded in f/s.

Related Questions

NFORMATION

NUWARE LIMITED

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2019 R
Cash flows from operating activities	2 540 000
Profit before interest and tax	7 700 000
Non-cash flow adjustments	700 000
Add: Depreciation	700 000
Profit before working capital changes Working capital changes	8 400 000 690 000
Decrease in inventory Decrease in receivables Increase in payables	180 000 310 000 200 000
Cash generated from operations	9 090 000
Interest paid	(150 000)
Dividends paid	(4 900 000)
Company tax paid	(1 500 000)
Cash flow from investing activities	(4 200 000)
Land, buildings and equipment purchased	(4 200 000)
Cash flow from financing activities	1 100 000
Increase in long-term borrowings	1 100 000
Net decrease in cash and cash equivalents	?
Cash and cash equivalents at beginning of year	?
Cash and cash equivalents at end of year	?

Why was depreciation included in computing the cash flow from operating activities? (2 marks)

Calculate the cash balance on 31 December 2019 if there was a bank overdraft of R460 000 on 31 December 2020. (2 marks)

Based on the cash flow information above, how does the company appear to be performing? Explain by referring to at least five items in the cash flow statement. (10 marks)

Long term loans were increased during 2020. Was this the most appropriate way of financing the purchase of assets? (3 marks)

1.5 What cash receipts increase cash but not profits? (3 marks)

raspberrymuskrat810

Statement of Cash FlowsâIndirect Method

The comparative balance sheet of Mavenir Technologies Inc. for December 31, 2014 and 2013, is shown as follows:

		Dec. 31, 2014	Dec. 31, 2013
Assets
Cash		$246,880	$232,300
Accounts receivable (net)		89,440	83,430
Inventories		252,460	247,030
Investments		0	95,700
Land		129,500	0
Equipment		278,560	218,400
Accumulated depreciation-equipment		(65,210)	(58,890)
	Total	$931,630	$817,970

Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors)		$168,630	$161,140
Accrued expenses payable (operating expenses)		16,770	21,270
Dividends payable		9,320	7,360
Common stock, $10 par		50,310	40,080
Paid-in capital in excess of par-common stock		189,120	111,240
Retained earnings		497,480	476,880
	Total	$931,630	$817,970

The following additional information was taken from the records:

The investments were sold for $111,970 cash.

Equipment and land were acquired for cash.

There were no disposals of equipment during the year.

The common stock was issued for cash.

There was a $59,040 credit to Retained Earnings for net income.

There was a $38,440 debit to Retained Earnings for cash dividends declared.

Required:

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Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Use the minus sign to indicate cash out flows, cash payments, decreases in cash and for any adjustments, if required.

Mavenir Technologies Inc.

Statement of Cash Flows

For the Year Ended December 31, 2014

Cash flows from operating activities:

Adjustments to reconcile net income to net cash flow from operating activities:

Changes in current operating assets and liabilities:

Net cash flow from operating activities

Cash flows from investing activities:

Net cash flow used for investing activities

Cash flows from financing activities:

Net cash flow provided by financing activities

Cash at beginning of the year

Cash at end of the year

taupegnat329

Dec. 31,2014		Dec. 31,2013
Assets
Cash		$130	$44
Accounts receivable(net)		75	55
Inventories		47	30
Land		107	125
Equipment		60	48
Accumulateddepreciation-equipment		(16)	(8)
	Total	$403	$294
Liabilities andStockholders' Equity
Accounts payable(merchandise creditors)		$51	$44
Dividends payable		8	-
Common stock, $10par		27	14
Paid-in capital inexcess of par-common stock		55	34
Retained earnings		262	202
	Total	$403	$294

The following additional information is taken from therecords:

Land was sold for $45.

Equipment was acquired for cash.

There were no disposals of equipment during the year.

The common stock was issued for cash.

There was a $87 credit to Retained Earnings for net income.

There was a $27 debit to Retained Earnings for cash dividendsdeclared.

a. Prepare a statement of cash flows, using theindirect method of presenting cash flows from operating activities.Use the minus sign to indicate cash out flows, cash payments,decreases in cash and for any adjustments, if required.

Tru-Built Construction Inc.

Statement of Cash Flows

For the Year Ended December 31, 2014

Cash flows from operating activities:

Adjustments to reconcile net income to net cash flow fromoperating activities:

Changes in current operating assets and liabilities:

Net cash flow from operating activities

Cash flows from investing activities:

Net cash flow provided by investing activities

Cash flows from financing activities:

Net cash flow provided by financing activities

Cash at the beginning of the year

Cash at the end of the year

Was Tru-Built Construction Inc.'s cash flow from operations moreor less than net income? LESS OR MORE

purplepug292

ACTG 3110 Chapter Notes - Chapter 5: Cash Flow Statement, Cash Flow, Income Tax

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